“The notice-and-cure provision by its terms does not cover FDCPA claims,” the CFPB argued. “Moreover, such a provision cannot restrict consumers’ rights under the FDCPA.”
According to the CFPB, Hackinen’s claim centers on the legality of the payoff statement fees under FDCPA, not a breach of contract. The agency criticized Nationstar for suggesting that these fees were covered by the deed of trust, emphasizing that the document does not address such charges.
Legal Precedents and CFPB’s Critique
The CFPB highlighted past court rulings, such as Gerber v. First Horizon Home Loans Corp., which have found similar unauthorized fees not subject to notice-and-cure provisions. They argue that applying such provisions to FDCPA claims would effectively create an “unenforceable” waiver of consumers’ rights.
Additionally, the CFPB criticized Nationstar’s reliance on the Ninth Circuit’s Giotta v. Ocwen Loan Servicing LLC ruling, which allowed a notice-and-cure provision for an FDCPA claim. The CFPB described this ruling as “unpublished” and criticized the Ninth Circuit for not addressing the impact on consumers’ statutory remedies.
Nationstar Mortgage Fee Suit : Implications for FDCPA Rights
The CFPB argued that enforcing the notice-and-cure provision would obstruct consumers’ rights to sue under the FDCPA. It claimed that such a provision would limit the statute’s one-year limitation period and potentially negate the ability to seek statutory damages.
